Wartime American Plans for a New Hungary

Document 1

Secret H Document 104

Preliminary B January 22, 1944

HUNGARY. POLITICAL RECONSTRUCTION: NATURE OF A PERMANENT GOVERNMENT.

I. THE PROBLEM

The problem is the form of government in post-war Hungary which the United States should favor.

The problem arises by virtue of the fact that the United Nations have made common commitments at Moscow in November 1943, to continue hostilities against the Axis powers until such powers have surrendered unconditionally.* If the declaration regarding Italy is used as a precedent the Hungarian people as the Italian people "shall be given every opportunity to establish governmental and other institu- tions based upon democratic principles." While Hungary for many years has maintained the form and structure of a parliamentary system, since 1920 the regime has been authoritarian in many of its practices. Furthermore, the extreme revisionist foreign policy of Hungary has contributed to the instability of Central and Eastern Europe. Moreover, President Roosevelt has stated that no vestige of fascism "in any of its malignant forms" shall be permitted to survive anywhere in the world and stipulated that the right of self-determination recognized in the Atlantic Charter does not include the right of any government "to make slaves of its own people."

In 1920, after a brief period of republican government and a soviet regime, the National Assembly made Admiral Nicholas Horthy head of the state. Although the Allied Powers refused to sanction the return of the Habsburgs, Hungary remained a monarchy with Admiral Horthy as Regent. The powers accorded to Admiral Horthy in 1920 were

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* Halmosy, op. cit., 559. extensive, including the command of the army, the power to initiate legislation and the right to prorogue and dissolve Par1iament. Additional authority was bestowed upon the Regent under laws passed in 1937; he was empowered to make recommendations as to his successor and he was freed from his formal responsibility to Parliament. In the period prior to 1937 the Government restricted the right of political groups to advocate fundamental economic and political reforms, a reform of land tenure and a modification of the electoral system. In some instances the Government interfered with the independence of the courts.

Governmental opposition, insofar as it was possible, grew in volume from 1938 to 1943, which was the period of outward Nazi orientation. If political interrogations became too embarrassing, as for example in May 1943, the Government could prorogue Parliament. With the resumption of parliamentary sessions, in October 1943, there seems to exist a greater degree of leniency in political debate, to make a better impression upon the United Nations. Late in 1942, on the ground of wartime expediency, the autonomous municipalities and the counties were deprived of their powers of nomination and election to local government offfices, thus losing the last vestiges of local autonomy; no guarantee of restoration at the end of the emergency was given.

Trianon Hungary was an agricultural country with some manufac- turing establishments, which suffered by being cut off from their essential raw materials--timber, iron ore, copper, lead, zinc, manganese, and salt. These raw materials were located in the succession states which had been complementary parts of the Hungarian economic system prior to 1918; these succession states were compelled to rely upon Hungary for a large part of their agricultural produce so that the former markets remained open to Hungary even after 1920. With the aid of foreign capital which poured into the country between 1920 and 1930 Hungary underwent a rationalization of industry and an adjustment to new economic conditions. The world depression, the tariff war with Czechoslovakia, the failure of the Österreichische Credit-Anstalt in May 1931, and the collapse of the German banking system in July 1931 led to an economic crisis in Hungary, but by 1933 a gradual recovery had taken place. After several years of more nearly normal foreign trade and average agricultural prices Hungary began sending its agricultural produce to Nazi Germany, which ultimately absorbed fifty percent of Hungarian exports. The Hungarian peasant with insuffficient land to meet his family needs, or with no land whatsoever, had no share in this prosperity, as political and economic power was concentrated in the hands of those who supported the régime. The lack of an extensive land reform such as the other succession states adopted, the continued control of the government by the "magnates", the fear of Habsburg restoration and official Hungarian preoccupation with the revision of the Treaty of Trianon, whereby the Magyars hoped to recover the lands ceded to the other succession states, made the neighboring states suspicious of Hungarian policies. As a counter-weight to the organization of the Little Entente, Hungary established close ties with Italy and Germany and friendly relations with Poland. Hungary's territorial gains at the expense of Czechoslova- kia, Rumania and Yugoslavia in the 1938-1941 period were acquired with the support of Germany and Italy. The present Hungarian régime, while endeavoring to preserve some freedom of action, has identified itself with the foreign policy of Nazi Germany. The Czecho- slovak and Yugoslav Governments-in-exile have expressed the view that no genuine understanding could be established with Hungary unless there were serious political, social and economic reforms. The Polish Govermnent-in-exile, which is not at war with Hungary, has made no such expression of opinion.

II. ALTERNATIVE SOLUTIONS

A. Authoritarian Régime

The acceptance of the present regime, the Regency, would mean the continuation of a government legally established. It would be in line with a traditional American non-intervention in the internal affairs of other states. It might be the logical solution in case the Regency was able to maintain itself and no intervention by the United Nations took place.

The retention of the Horthy Regency or of its successor, with the same group in power, would mean the continuation of an authoritarian regime. In all probability Hungary would again be a factor of instabili- ty in the Balkan-Danubian region, unless a satisfactory solution of regional economic and territorial problems was reached. The Russians have expressed their objection to retention of the Regency and of the regime of the landlords.

If the throne were filled by a Habsburg in the event of Horthy's resignation or death, it is not unlikely that a similar group no less objectionable, would gain power. B. Democratic Constitutional Monarchy

The development of a truly democratic government within the framework of a parliamentary system would involve the replacement of the present régime by one which would establish a democratic electoral system, guarantee and protect the exercise of civil and political rights, and pressure an adequate land reform. It might be prepared to recognize equitable boundary settlements with the succession states and to collaborate with them in the interests of peace and stability.

The revival of constitutional monarchy might result in the constitu- tion of the kingless monarchy which has legally existed for twenty-three years. It is legally possible to designate a successor to the Regent should the Regency become vacant. In that event the Upper and Lower Houses must meet in joint session within eight days to elect a Regent. Until the election is completed the Houses cannot adjourn. In the interval prior to the election a Council of State, composed of seven members, leading personalities of the two Houses, becomes the executive power. On the other hand the Regent can recommend his successor; he then recommends three persons of his own choice to Parliament. Parliament, however, is in no way bound by the Regent's recommendations. The chief objection to the kingless monarchy is its record of non-parliamentary and anti-constitutional exercise of powers during the two decades of its existence. It is not clear to what extent the Hungarian electorate would favor the continuation of the Regency or the election of a king. The restoration of a Habsburg as King of Hungary would be inacceptable to the neighboring states and unfortu- nate for the cause of democratic government.

C. Centralized Democratic Republic

A democratic republic might take the form of a government similar to the one which existed for a brief period in 1918-1919. Some republicans claim that the chances of a republican government coming into power through a mandate from the electorate seem greater than those of any monarchial régime. Certainly without the encumbrances of the monarchical record of inaction prior to 1938 or of reliance on the landed gentry the republican government could give its attention to a land reform. It is now rather generally conceded that only with a program of adequate land reform can a republican group win power in Hungary.

At the present there are indications of the emergence of a "people's front" in Hungary. The "people's front" has active and passive members Political Reorganization of Hungary 255

among factory and farm workers, university professors, actors, writers and people of liberal thought. These Socialist-Agrarian-Liberal groups include the organized Trade Union of Landowners, founded on May 9, 1943, the Small-holders Party and representatives of the Peasants' Association, the Social Democratic Party and Liberal Party. If this coalition were to take the form of a democratic republican government favoring electoral and land reforms, it would be opposed by the feudal landlords, the bureaucracy, the ruling army cliques and possibly the Roman Catholic Church.

D. A Decentralized Republic

A federation within Hungary on the Swiss model has been suggested in certain Hungarian circles.* They propose a federal structure for the states of the Danubian area including Hungary and regard the question of boundaries as adrninistrative problems of secondary importance. The proposal implies the adoption of the Swiss cantonal system in which sovereignty is lodged with the canton and not with the federal or central governments as is the case in Hungary. The cantonal system, as applied to Hungary, would accord to such minorities as remain in Hungary a degree of cultural and political autonomy. Under a decentral- ized regime the Hungarian county and municipality might recapture some of their very wide and real autonomy enjoyed until 1942. This alternative would encourage an old trend in Hungarian politics, autonomy on a local governmental level.

Decentralization might be impractical in that it could lead to disorder, especially if adequate resources and personnel for cantonal administration were lacking, as might be the case in the northeast part of Hungary. Decentralization might provide the Hungarian Govern- ment with the means of escaping the realization of democratic, constitutional and agrarian reforms which many Hungarians are demanding.

Decentralization which runs counter to economic trends of the last two decades, would be practical only if Hungary were a member of a multinational Federal State or of a democratic Danubian or East European Federation. At the present such regional units are viewed with disfavor in official quarters.

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* The reference is to Oszkár Jászi, Rusztem Vámbéry, and the democratic wing of the Hungarian exiles, which they headed. E. A Soviet Régime

If Russian forces occupy Hungary previous to the creation of a permanent national government a soviet régime may come into being as a result of the Red Army's occupation of Hungarian territory. In this event, it is possible that the Communist elements within the present "people's front" would grow in strength and gain control of the whole left-wing movement. In that case a social revolution would probably follow the overthrow of the present régime of landlords followed by the nationalization of the land, and perhaps by the establishment of collective farming along Soviet lines and of other institutions character- istic of socialized (Sovietized) economy.

While this solution would represent a complete break with the feudal past of Hungary, it is possible that the peasants with their love of land would oppose collectivized agriculture. The propertied elements would be completely opposed to this solution, and recollections of the Béla Kun Soviet Republic of 1919 might serve to dampen enthusiasm among all classes for the establishment of a Soviet régime.

A Hungarian Soviet regime would probably be federated with, or in any event would be greatly influenced by the U.S.S.R., and its foreign policy would have an eastern, not western, orientation.

III. DOCUMENTATlON

A. Available Memoranda

Land Distribution in Hungary (T-236; Feb. 8, 1943).

Hungarian Land Reform Since 1918 (T-430; Dec. 29, 1943).

Hungarian Agriculture (T-431; Jan. 7, 1944).

Treatment of European Enemy States (P-176; Jan 15, 1943).

Soviet War Aims (T-200; Dec. 19, 1942).

B. Other Studies

Rustem Vambéry, The Hungarian Problem (Published by the Nation, 1942).

Oscar Jászi,The Dissolution of the Habsburg Monarchy (Chicago, 1929).

C. A. Macartney, Hungary and Her Successors (London, 1937).

A.J.P. Taylor, The Habsburg Monarchy, 1815-1918 (London, 1941). Cahiers d'informations francaises, no. 7, Un état dans "l'espace vital;" Le pangermanisme at la conquete de la Hongrie. Preface de M. Henri Hauser (Paris, 1940).

IV. PLANS FOR FURTHER RESEARCH

The Horthy Régime.

Political Forces in Hungary.

The Hungarian Movement outside Hungary: Free Movements.

Problem of Minorities within Hungary.

PS:MEBradshaw:AHA:JRB Box 153

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Wartime American Plans for a New Hungary